start a hobby

Start treating your hobby like a genuine business instead of just a pastime. Set up a bookkeeping system to log your income and company expenses. Open a business checking account and credit card. And consult with a legal or tax professional about whether you should create a separate legal entity for your start-up, such as a corporation or limited liability company.

Estimate your start-up capital, the amount of money you will need to get up and running, and your working capital, the amount you'll need to stay afloat until you become profitable. This way you will know what you can afford to spend your money on at first and what can wait until later, helping you to avoid running out of funds too soon. Meanwhile, try paying off as much personal debt as you can. Its tough to make two car payments, make a mortgage on an over leveraged house, pay off student loans, and chase a dream at the same time, says Rusty Meador, who early in 2009 turned his passion for woodworking into Beach & Barn, a home-restoration company in Wilmington, N.C. Being debt-free makes starting a business more fun and less stressful, he adds.

Know the true value of your product, and be willing to set aside your own wants. Keep your hobby-self in check, or you will end up with a closet full of unsalable stuff.Sometimes collectors counter offer and want Hembrough to pay more for their toy. He will often pass on the purchase because he knows what toy collectors are willing to pay for that particular item in that condition. He might be dying to own that toy, but he stays focused on the profit and loss realities.

Opt for building a strong relationship over making the biggest profit. Hembrough isnt out to rip off toy collectors, as hes hoping to come back and visit them again to make more purchases. He approaches each collector with respect, and always asks each time, Are you willing to sell me this? before he names a price.

Getting you message out is just as important as having good products. When Hembrough takes a risk and makes a big purchase, like a Star Wars pedal car from the 1980s, he calls his assistant from the road to get her started making marketing calls immediately. With a higher-ticket item, it'll take more marketing to find a willing buyer, so he gets right to it.

In the collectible business, its important to make sure you dont tie up too much money in inventory, or soon you dont have grocery money. Many of Hembrough's toy purchases are under $20, but the Star Wars speeder was a $750 purchase all the more reason to find a buyer quickly to get that cash liquid again to cover bills.

Toy collecting is a huge arena with many areas of specialty. Hembrough smartly sticks with what he knows best and has cultivated a customer base for classic TV and movie-related toys, primarily from the 1980s.